Government can Save Billions with NGVs in USA – Clean Skies Report

August 15, 2012 | USA

This week, the American Clean Skies Foundation (ACSF) issued a new report that urges the federal government to switch its transportation contractors to carriers that fuel on domestic fuels such as natural gas. According to ACSF, the federal government spends nearly $150 billion annually on transportation services, and it could save as much as $7 billion annually by switching just 20 percent of its business to carriers who fuel on domestic alternative fuels.

For example, in Apr-May 2012, ” fuel costs to operate cars, trucks and buses on compressed natural gas (CNG) or liquefied natural gas (LNG) were 26–43 percent lower than for vehicles operating on gasoline or diesel fuel.” The US Department of Energy recently stated the price differential will likely continue for at least twenty years.

The report recommends that federal policy require that shippers follow requirements similar to those already imposed on federal agencies. Federal agencies are required to purchase alternative fuel vehicles, reduce petroleum consumption and increase their use of alternative fuels. To date though, the policy environment has had only limited effect: “Non-petroleum fuels (mostly ethanol, biodiesel and CNG) accounted for only 4 percent of the total fuel consumed by federal fleets.”

The report’s authors point out that the transportation services sector actually provides a much larger opportunity for cost saving, petroleum reductions and emission reductions than the already targeted federal fleets.

To realize the budget and environmental benefits described above, the ACSF report makes three main recommendations:

Starting in 2014, federal agencies should publish annual targets and initiatives for buying more alternative fuels, reducing petroleum and lowering emissions associated with major transport services.

Starting in 2015, agencies should require major carriers to use alternative fuels for at least 5 percent of contracted shipments (measured in ton-miles). This requirement should increase by at least 2 percent each year from 2015 to 2025.

Starting in 2016, federal agencies should publish annual targets, and initiatives for using more alternative fuels, reducing petroleum and lowering emissions associated with the transport services used by major vendors to deliver products to the government (i.e., for vendor contracted shipping services not covered by the prior recommendations).

ACSF summarises: “The federal government’s shift from oil to alternative fuel and greater fuel-efficiency is not just about leading by example. It is about changing the management of fleets common to both government and private transportation service contracts. That could not only save taxpayer dollars, but it could have large economic and environmental benefits — positively shifting supply and prices for alternative fuels and vehicles throughout the nation.”

ACSF points out that the current baseline provides solid argument for change (extracts from the report):

“Transportation accounts for about 71 percent of petroleum use in America and petroleum remains by far the dominant fuel used for transportation, providing 97 percent of the total energy used in this sector. The transportation sector consumed 26.88 quadrillion Btu from liquid fuels and other petroleum sources in 2010, up 2 percent from 2009. DOE projects that overall transportation energy consumption will continue growing through 2020.”

“Trucking, a relatively inefficient mode of transport, accounts for most shipments of goods in the United States. In fact, 70 percent of all goods (by weight), and 97 percent of all consumer goods move by truck. Heavy-duty and medium-duty trucks burn about 35 billion gallons of diesel annually, often getting only 5 to 8 miles per gallon. Heavy-duty vehicles
account for 17 percent of transportation oil use and 12 percent of all U.S. oil consumption.”

“Petroleum is the largest source of carbon dioxide (CO2) emissions in the U.S. (about 44 percent of the nation’s total CO2 emissions inventory). Since petroleum is heavily used for transportation, the transport sector alone accounts for approximately one third of U.S. CO2 emissions. Nearly 6 percent of all U.S. GHG emissions come from heavy-duty vehicles. Diesel emissions also contain carcinogens and other pollutants that are harmful to public health.”

The authors estimate that their recommended transportation-related fuel-switching and efficiency improvements for federal agencies could produce annual cost savings of as much as $7 billion, more than five times annual current expenditure on fuel for the 660,000 fleet vehicles, or more than $25 billion by 2025.

Established in 2007, ACSF seeks to advance America’s energy independence and a cleaner, low-carbon environment through expanded use of natural gas, renewables, and efficiency. Click here to view the full report.